As illegal mining surges, Ecuador vows to fight on

Illegal mining is still on the rise in Ecuador, and associated crimes like environmental destruction and extorsion are not just weakening public security but are also affecting the reputation of legal miners.

While hotspots include Esmeraldas, Imbabura and Azuay, the energy and mines ministry said 19 of Ecuador's 24 provinces are affected, with damage done to protected areas such as the Podocarpus national park in the Amazon.

Just this year, illegal mining has impacted 420ha in the Punino river area between the provinces of Napo and Orellana, where associated deforestation has impacted 1,422ha since 2019, according to a study by the Andes Amazon Monitoring Project (MAAP).

MAAP is a joint initiative between Washington-based NGO Amazon Conservation and Ecuador's Ecociencia, with support from Norway's development agency Norad.

Illegal mining is often carried out along the borders with Colombia and Peru and benefits from illicit cross-border flows that are essential for the gold trade, like explosives, mercury and weapons smuggling, and migration of illegal miners, according to a study by the Department against Transnational Organized Crime of the Organization of American States.

The cross-border networks facilitate illicit financing and exchange of know-how between illegal miners and money launderers, the study said.

According to an investigation by Ecuadoran outlet Código Vidrio, illegal mining is a primary income source for organized crime groups such as the Los Lobos gang, considered an arm of Mexico's Jalisco Nueva Generación cartel.

Código Vidrio reported that Los Lobos controls 20 gold mines and 40 groups of illegal miners directly, and extorts companies that hold concessions in 30 more mines, gaining US$3.6 million per month.

The president of Ecuador's mining chamber, María Eulalia Silva, told BNamericas that organized crime is taking over small-scale mining areas like the town of Ponce Enríquez in Azuay province, and in the Amazon and the country's north.

In January 2023, then-president Guillermo Lasso declared illegal mining a national security threat, after direct links with other crimes such as money laundering, drug and arms trafficking were exposed.

On Tuesday, prosecutors and police raided the offices of the mining department and regulatory agency Arcom as part of an anti-corruption investigation focused on the mining sector.

Preliminary investigations found irregularities in granting 652 mining concessions and an unusual increase in the number of gold processing plants.

Silva said the government is evidently trying to address the issue.

In July, the regulator authorized the military to destroy machinery and disable and demolish other assets and supplies used in illegal mining.

The tax authority subsequently blocked 73 mineral exporting companies from the system because they could not be located at the registered physical addresses.

“We're seeing agile actions,” Silva said.

Although Ecuador's only producing large-scale mines, Fruta del Norte and Mirador, have not yet been affected, they, like licit miners, are suffering reputational damage due to the devastation criminals cause, as the population does not necessarily distinguish between legal and illegal activity.

Among the causes that facilitate illegal mining are institutional weakness, corruption, the closure of the mining registry and restrictions on formal mining, according to political risk consultancy Prófitas.

The mining registry has been closed since 2018, meaning concessions cannot be granted to private companies. It should be reopened, but in a transparent way, Silva said.

Apart from government action, the mining chamber deems the registry key to curb illegal activity.